WARWICK — State regulators will consider a new minimum charge for livery cabs, limousines and other cars classified as “public motor vehicles” after objections were raised to setting the charge at $40...

Alex Kuffner Journal Staff Writer kuffneralex

WARWICK — State regulators will consider a new minimum charge for livery cabs, limousines and other cars classified as “public motor vehicles” after objections were raised to setting the charge at $40 per trip.

The state Division of Public Utilities and Carriers has opened a new docket to determine whether to maintain or lower the $40 minimum charge that was set to go into effect Nov. 11 after a nine-month rulemaking process that also created safety standards for the industry.

The division suspended enforcement of the minimum charge after four car companies filed a lawsuit in Superior Court seeking to have it overturned. They argued that it is too high and would unfairly limit their business.

The companies — L.C. Taxi, Rainbow Sedans, Corporate Limousine Services and Dewey’s Transportation — agreed to withdraw the court case after the division opened a new docket. Division administrator Thomas F. Ahern did so on Friday. A date for a hearing in the docket has not been scheduled.

In the order for the new docket, Ahern reiterated that state legislation approved by the General Assembly in 2012 required the division to set a price floor for public motor vehicles in order to differentiate them from more strictly regulated taxi services.

“It is the Division’s conclusion that the legislative intent … is to preserve the financial success and operational integrity of both of these most valuable local transportation industries in the interest of those passengers who rely on these services,” he wrote. “It must be emphasized that the General Assembly has determined that the establishment of a minimum allowable charge for [public motor vehicles] will accomplish this goal.”

Michael F. Horan, the Pawtucket attorney who is representing the car companies, said that they have not discussed an alternative minimum charge.

“Our immediate concern was the $40 figure,” he said.

The minimum charge drew widespread attention after Uber, the San Francisco-based tech company that has developed a smartphone application to facilitate business between car companies and customers, cried foul. The company operates in 50 cities around the world and started operations in Providence two months ago.

Uber contracts with car companies, taking a share of any fees they charge for rides in exchange for setting up those rides. It does not work with the companies that filed the lawsuit.

In the days before the minimum charge was set to take effect, Uber launched an aggressive social-media campaign, saying the new rate would effectively force the company out of business in Rhode Island. By enforcing a $40 floor price, the company contends, the DPUC would be effectively cutting off a large chunk of Uber’s market and reserving it for taxis that can offer cheaper fares.

On Friday, Uber filed a separate petition with the division that also asked for a new docket to be opened. The company called on the division to carry out a cost-benefit analysis to assess the impact of the minimum charge on local businesses. It also urged the division to reexamine the dividing line between public motor vehicles and taxis.

Uber has framed the issue in terms of consumer choice.

“By artificially increasing the price for transportation, price controls (such as a minimum charge of $40 per ride) would distort market dynamics, decrease demand for limousine transportation service and lead to limousine companies leaving the Rhode Island market, to the detriment of customers seeking transportation options,” Alan M. Shoer, the attorney representing Uber in Rhode Island, wrote in the filing.